Gov.-Elect Jerry Brown's new worst nightmare

BY DEBRA J. SAUNDERS
Creators Syndicate

POSTEDNovember 6, 2010 12:15 a.m.

"The taxpayers gave and they also took away. On one hand, the people said by a majority, 'Give us a budget.' On the other hand, they said, 'Don't pick my pocket.'" This was Jerry Brown's verdict on California voters' picks on ballot measures delivered at his post-victory press conference Wednesday.

In passing Proposition 25, which allows the Legislature to pass a budget with a simple majority vote, the people made it easier for Sacramento to pass a budget. But in approving Proposition 22, which prohibits using funds dedicated to local services to close the state's budget hole, voters made it much harder. Ditto Proposition 26, which creates a two-thirds vote threshold to increase fees.

Brown was especially mindful of the voters' rejection of Proposition 21, which would have created an $18 vehicle-license fee surcharge to fund state parks. He noted, "The voters last night turned down a mere $18-a-year car tax by about 60 percent, so I would say that the electorate is in no mood to add to their burdens." Brown isn't eager to raise taxes.

Wednesday, Senate President Pro Tem Darrell Steinberg told reporters the next budget shortfall could reach $12 billion. Brown will have his hands full. Yet fixing the budget may be the easier half of Brown's job.

Like his vanquished GOP rival Meg Whitman, Brown says he prefers to increase revenue not by raising taxes but by reviving California's lagging economy. Thus, Brown must improve the state's business climate. Pronto.

Like California voters who rejected Proposition 23, which would have delayed the state's global-warming law (Assembly Bill 32) until unemployment hits 5.5 percent, Brown thinks "green jobs" are the answer.

Brown has a reputation for talking to people who disagree with him. That's good, because I didn't hear a word from Brown on Wednesday that made me believe he understands what he has to do to staunch the flow of jobs, businesses and people with assets from the Golden State.

If he wants dynamic growth, Brown might want to talk to Whitman, who told me in March that if she had to start eBay all over again, she'd probably locate in Texas.

According to the CNN exit poll, Brown won among voters earning less than $100,000, while Whitman won among the 29 percent of voters who earn more than $100,000.

Now they see a Democratic governor, Democratic Legislature and Democratic budget rules — and they are afraid. It doesn't help that Brown will be working with a Democratic Legislature obsessed with mandating that minors wear ski helmets, banning trans fat from restaurant food and finding new ways to tell productive people how to run their businesses.

Already, the state is developing what Chapman University fellow Joel Kotkin called in this summer's City Journal a "bifurcated social structure" — with lots of rich people, lots of poor people who can mow their lawns, but a thinning middle class.

California Lutheran University found that California suffered a steep decline — steeper than in other states — in households earning between $35,000 and $70,000. Unfortunately, new progressives — like Brown — "favor policies such as 'smart growth' and an insistence on 'renewable' energy sources" that, Kotkin wrote, could make certain areas "look like a gated-community."

Already, I've heard grumbling from folks who are making plans to pull up stakes because they feel as if they are being squeezed by California's high taxes and declining standard of living. Sure, it's probably just talk. But California can't afford to lose a single one of the 140,000 households that earned more than $480,000 in 2008, and represent 1 percent of tax filers, yet pay almost half of the state's income taxes.

As mayor of Oakland, Brown was pro-business and pro-development. But he also went for flaky causes that are simply too precious in this difficult economic environment. He was a key figure, for example, in hyping bike lanes and light rail and otherwise delaying reconstruction of the Oakland-Bay Bridge.

I asked Brown spokesman Sterling Clifford on Wednesday if Brown had considered delaying the pending implementation of AB32. Bad timing. The law threatens some jobs in the state's manufacturing sector (which represents one-fifth of state jobs), but would create only 1,000 to 3,600 permanent "green jobs" each year, according to a recent UC Berkeley study.

Clifford answered, "We have to get past this idea of AB32 being bad for business."

OK. Then Brown better come up with new ways to convince employers that Sacramento wants them to hire, stay in business and make a profit. If not, that scary 12.4 percent jobless rate could grow.